Aug 8 The U.S. Securities and Exchange
Commission has reached a settlement agreement in principle in a
lawsuit accusing New York financial services firm ICP Asset
Management and its founder of fraudulently managing four
collateralized debt obligations.
The settlement of the case, one of several the SEC pursued
after the financial crisis and the collapse of the U.S. housing
market, was disclosed in a letter by lawyers for the parties
filed in U.S. District Court in Manhattan on Wednesday.
It had been the first case by the commission against a CDO
Lawyers for the SEC, ICP and individual defendants including
founder Thomas Priore said they anticipate submitting the
settlement for court approval by the end of August.
In light of the settlement, U.S. District Judge Lewis Kaplan
said he would delay a trial initially scheduled to start Sept.
11 to Sept. 25.
Terms of the settlement were not disclosed. The letter said
the agreement is subject to approval of the SEC's five
commissioners. Any settlement would also be subject to Kaplan's
Kevin Callahan, a spokesman for the SEC, declined comment.
Malachi Jones, a lawyer for Priore, did not respond to requests
The SEC sued ICP and Priore in June 2010, claiming they
violated federal securities laws by engaging in improper
transactions to defraud four multibillion-dollar "Triaxx" CDOs
invested mostly in mortgage-backed securities of tens of
millions of dollars.
An amended complaint filed in June 2011 added new charges,
claiming that Priore had sought to transfer millions in real
estate assets after finding out the SEC planned to sue him. The
new complaint added Priore's wife Lori and his friend Bertrand
Smyers to the case.
The settlement would also cover claims against Lori Priore
and Smyers. Their lawyers, S. Robert Schrager for Lori Priore
and Simon Miller for Smyers, did not respond to requests for
Before the settlement was reached, Kaplan on July 31 denied
the SEC's request for partial summary judgment on the bulk of
its allegations against Priore. Kaplan said at the time he would
explain his reasoning in a court opinion later on.
The case is SEC vs. ICP Asset Management, LLC et al. U.S.
District Court, Southern District of New York, No. 10-4791.